Problem 6-6A (Algo) Analysis of inventory errors LO A2 Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $55,000 and Year 2 ending inventory is overstated by $25,000. Year 1 $ 730,000 For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity 273,000 Year 2 $ 960,000 280,000 1,365,000 1,585,000 Year 3 $ 795,000 255,000 1,235,000 1, 250,000 1, 252,000 1,392,000 Required: 1. For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. 2. What is the total error in combined net income for the three-year period resulting from the inventory errors? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. (Amounts to be deducted must be entered with a minus sign.) Year 1 Year 2 Year 3 Cost of goods sold: Reported amount For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. (Amounts to be deducted must be entered with a minus sign.) Year 1 Year 2 Year 3 $ 0 $ 0 $ 0 $ $ 0 Cost of goods sold: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Net income: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Total current assets: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Equity: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount $ 0 PA $ $ S 0 normid Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $55,000 and Year 2 ending inventory is overstated by $25,000. For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Year 1 $ 730,000 273,000 1, 252,000 1,392,000 Year 2 $ 960,000 280,000 1,365,000 1,585,000 Year 3 $ 795,000 255,000 1,235,000 1,250,000 Required: 1. For each key financial statement figure-(a), (b), (c), and (a) above-prepare a table to show the adjustments necessary to correct the reported amounts. 2. What is the total error in combined net income for the three-year period resulting from the inventory errors? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the total error in combined net income for the three-year period resulting from the inventory errors? Error in total net income of three years